Assume that you are an analyst for Sincere Securities and that last Friday you caught up with an old university friend Wally Magoo for a beer and schnitty at the TA. Over a coldy or two, the discussion turned to the valuation of companies and Wally who hadn't paid close attention to his lecturer in"Business Capstone"said,"I don't know why anyone would ever try to value earnings. Obviously, the market knows that earnings can be manipulated and only values cash flows". How would you respond to Wally's comment?